Crypto Markets Begin Week Steady After Sharp Weekend Sell-Off
The cryptocurrency market opened the week on relatively stable footing after a volatile weekend selloff. Both Bitcoin (BTC) and Ether (ETH) showed signs of recovery, finding support following heavy losses triggered by the largest spot ETF outflows in months.
Between Thursday and Friday, Bitcoin ETFs saw nearly $1 billion in investor outflows, pushing BTC prices down to approximately $114,000. Meanwhile, Ether experienced $152 million in redemptions on Friday, ending nearly a month-long streak of daily inflows.
These sharp declines coincided with geopolitical developments, notably former President Donald Trump’s announcement of new tariffs targeting imports from both Asia and Europe, which sent jitters through global financial markets and impacted risk-on assets, including cryptocurrencies.
Trump’s Tariffs Cast a Shadow Over Risk Markets
The newly announced trade measures have created renewed uncertainty for investors, particularly in sectors sensitive to global economic conditions. The broader concern is that escalating tariffs could reignite inflationary pressures while also slowing international trade, posing a dual threat to both traditional and digital markets.
“The dip was driven by concerns over Trump’s tariff stance and the Fed’s signal that it’s not keen to cut rates soon,”
said Jeff Mei, COO at BTSE, in a Monday note to CoinDesk.
“But opportunistic buyers are already stepping in before U.S. markets open, indicating the fear may be overdone.”
This sentiment has given way to some optimism among traders, as BTC holds above $114,500 in early Asian trading and ETH trades just above $3,550—both within critical short-term support zones.
XRP and Dogecoin Lead Market Gains
Among top-performing digital assets, XRP and Dogecoin (DOGE) led the market on Monday, each gaining up to 5%. Other altcoins such as Cardano (ADA), Binance Coin (BNB), and Solana (SOL) also posted gains of over 3%, reflecting a broader shift toward high-volume, retail-favorite tokens.
The resilience of retail-driven coins may point to increasing confidence that the recent downturn was more technical than fundamental.
Institutional Liquidity Cushions the Blow
According to market experts, the rise of institutional participation in digital asset trading has significantly softened recent volatility. Deeper liquidity and more sophisticated hedging strategies are helping stabilize the market during moments of stress.
“The rising presence of professional desks has brought deeper secondary liquidity,”
said Augustine Fan, Head of Insights at SignalPlus.
Fan noted that without the presence of exchange-traded funds and institutional flow, the weekend’s price action could have resulted in a far more chaotic unwind, particularly in pre-ETF trading environments.
Market Cautiously Optimistic Ahead of Fed Signals
While some price recovery is underway, major resistance levels are still proving sticky. Bitcoin remains below the $118,000 breakout zone, while Ethereum needs to maintain strength above $3,500 to avoid triggering automated sell programs and systematic selling.
ETF flows remain muted, indicating investor hesitation in fully re-entering the market until there’s greater clarity on macroeconomic policy and the Federal Reserve’s next move.
Broader Market Sentiment: Cautious but Stabilizing
Outside of crypto, macroeconomic indicators are offering a mixed but cautiously encouraging backdrop. U.S. equity futures are up 0.4%, supported by expectations that the Federal Reserve may consider easing following a weaker-than-expected jobs report released last Friday.
The MSCI Asia Pacific Index reversed early losses, while Hong Kong tech stocks snapped a seven-day losing streak. Meanwhile, 10-year U.S. Treasury yields inched higher to 4.24%, suggesting bond markets are still wary of inflation but not pricing in immediate rate hikes.
Commodity and Currency Markets Stay Soft
In the commodities space, oil prices drifted lower as OPEC+ signaled the end of a recent cycle of production hikes. This easing in energy prices is likely to help counterbalance some inflation fears, which have become closely linked to market sentiment across sectors.
The U.S. dollar weakened slightly, continuing a mild downward trend that could benefit emerging markets and commodities, including digital assets.
September Outlook: High Volatility Expected
Analysts are already looking ahead to Q4, expecting a more volatile trading environment as inflation data, Fed policy, and global trade developments all converge. Investors are being advised to reduce risk exposure ahead of a potentially turbulent September and year-end period.
“We believe it’s an opportune time to dial down risk exposure in expectation of a busy September,”
Fan added, emphasizing that ETF inflows and macro signals will be key market drivers in the weeks ahead.
Key Takeaway: XRP and Risk-On Assets Show Resilience
Despite short-term headwinds driven by ETF outflows and geopolitical uncertainty, key crypto assets like XRP and DOGE have shown resilience, suggesting retail demand remains strong. With Bitcoin and Ether stabilizing near crucial support levels, the market may be preparing for a rebound—pending macroeconomic clarity.
As the Federal Reserve, Trump’s trade policy, and inflation concerns remain in focus, crypto traders should brace for elevated volatility but also potential opportunity in select assets.
Reference : Shaurya Malwa